Rigged HFT-Driven Paper Trading Drives Gold Lower Today

I want to preface this commentary with the “proviso” that I have no idea how violent to the downside this attack on the precious metals will get. No one does. It could end today; it could end at the 50 dma (approx $1,248 on the front-month paper gold instrument traded on the Comex); it could go all the way down to the 200 dma. Even the banks who are driving this activity have no way of knowing.

I am using every step down in gold to move more money into my BitGold account. The account functions almost like a checking account. You get assigned individual kilo bars or interest in a kilo bar when you move money into the account. You benefit to the upside when gold shakes off the intervention and moves up again. You also can get a Mastercard that lets you access the funds easily. The best part is that BitGold operates outside of the Central Banking system. Click here – BITGOLD – or on the image to the right to get started.

Gold began selling off as soon as the Globex Comex computer system opened for the week Sunday evening (6:00 p.m. EST). But the distinctive “waterfall” price plunges did not begin until about 30 minutes after the open of the Comex floor trading at 8:20 a.m EST (Click on the image to enlarge). This trading pattern is characteristic of the paper bombs the bullion banks throw at the market in order to trigger the stop-losses set by the hedge funds. The trading is mostly computer-based. Trading volume was light compared to the spike up on Friday after the jobs report, which makes it easier for the banks to plunge the market.

Note: if anyone wants to learn about the mechanics involved in “plunging” the markets, read “Reminiscences of a Stock Operator” by Edwin Lefevre. It’s the unofficial biographical accounting of Jesse Livermore. It’s a must-read for anyone who wants to understand the extent to which the current market is rigged. The only difference between now and the 1920’s is that now the Central Banks are directly behind the activity and they are driven by an entirely different motive than that of Jesse Livermore.

Speaking of the jobs report, the most idiot attribution for the sell-off in gold comes from Investing.com – LINK – which “informs” us that gold futures fell overnight because “investors viewed Friday’s jobs data as less disappointing than first thought.” I don’t really know how to respond to that assertion other than to question the author’s relative level of intelligence.

This is an HFT computer algo attack operation. They have a problem with the physical market. I surmise that it’s worse in silver than in gold. Gold is now only 1.4% away from a 50 dma “correction.” The 50 dma has been pretty good support. There’s a good possibility that the 50 dma will “stop” the sell-off. If not it will drop pretty quickly to the 200 dma. Either way, the only way to take advantage of this is to add to positions with every “step function” price plunge lower. The market sentiment levels per Marketvane and the HGNSI are still not even remotely close to levels that indicate a contrarian sell-off is likely.

In fact, if anything, the continuous flooding of anti-gold propaganda from the media and Wall Street convey a sense of desperation from the powers that be that derive their “power” from an ability to control fraudulent fiat currency.

Dave, I was thinking the same and will use this opportunity to add to miners, which are selling of large as lots of people run for the exits. Can you add the volumes to the price chart? Thanks. – Micah

I bought more shares of a junior miner that I already own. All my miner holdings are from recent purchases – 2,3 months ago. I am going to hold them all for at-least one full year and see what happens.

Dave, I too have a BitGold account I opened last June. I took delivery of some of the 10 gram cubes and drove down to a couple bullion dealers in the area to exchange some for silver. When the SGR was 80 to one it was interesting to see how a little bit of gold transitioned into a big load of silver. In any case, I have two dealers who verified that it was really gold, and are willing to trade. Two other dealers were not interested as they were more focused on numismatic coins.

My strategy now is to have some physical gold and silver, some bitcoin, some miners stocks and miners calls, and some of your recommended puts. So far, my puts are underwater, but I believe that’s a timing issue. Housing, cars, motorcycles and banks are holding up better than expected. It seems that traders are more focused on something other than fundamentals. Like momentum and a firm belief in fraudulent accounting. I’m betting against corruption and fraud, but it seems I’m currently in a minority. Do investors really think they should load up on stocks that have P/E’s of 277 to one, 65 to one or negative earnings as AMZN, FB, and LNKD respectively? My guess is that things turnaround for these ideas before they expire in 2017.

“The gold price” is following USD/JPY tick-for-tick today (Tuesday)…which leads me to believe there may be a lot of truth in the story about the BOJ having a long-JPY/short-gold or vice-versa on occasion) strategy.